The ASPI opened the week with a sharp decline, driven by mounting concerns over the Middle East conflict. Although the index partially rebounded on the back of bargain hunting, it failed to fully recover the previous losses and closed the day in the red at 17,360, ultimately losing 67 points.
HNB, COMB, LOLC, HAYL, and CTC emerged as the top negative contributors to the index. Moreover, widespread selling pressure triggered broad-based price declines across most sectors. Amidst subdued HNW activity and relatively high retail investor participation, turnover amounted to LKR 3.1Bn, which is still 37.5% below the monthly average of LKR 5.0Bn.
The Diversified Financials sector dominated overall turnover with a 21% share, while the Capital Goods and Banking sectors jointly accounted for 34% of total market turnover. Foreign investors remained net sellers with a net outflow of LKR 78.1Mn.
Geopolitical tension nudges yields slightly higher
Heightened global political uncertainty has weighed on the secondary market, sparking bouts of selling amid moderate trading volumes.
This pressure translated into a modest upward shift of the yield curve, with the 2028 maturities bearing notable impact. Consequently, 15.02.2028 traded at 8.80% while 15.03.2028 traded at 8.85%.
Meanwhile, 01.05.2028 and 01.07.2028 were seen trading at 8.90%. Moving ahead on the yield curve, 15.09.2029 traded at 9.48% and 15.12.2029 traded at 9.50%. Finally, 15.12.2031 changed hands at 10.32% while 15.09.2034 traded at 10.48%. In the forex market, the LKR depreciated against the greenback, closing at LKR 299.4/USD, compared to the previously seen rate of 299.0/USD.
Meanwhile, overnight liquidity in the banking system contracted to LKR 131.9Bn from LKR 187.5Bn in the previous session.
Courtesy: First Capital Research
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